ED registers money laundering case to probe alleged liquor scam during previous YSRCP govt in Andhra

Hyderabad/New Delhi, May 8 (PTI) The Enforcement Directorate (ED) has registered a money laundering case to investigate an alleged liquor scam that took place in Andhra Pradesh during the previous YSRCP regime, official sources said on Thursday.


The federal probe agency has filed an Enforcement Case Information Report (ECIR) under sections of the Prevention of Money Laundering Act (PMLA) to probe alleged irregularities in the sale of liquor in the state.

The ED case stems from a September 2024 FIR of the economic offences CID of the state police, they said.

Sources said the agency will investigate liquor agents and vendors among others.

ED will also examine the possible involvement of government officials in this case.

The ED has also been probing irregularities in the liquor trade in Chhattisgarh and Bihar.

A Special Investigation Team (SIT) formed by the TDP-led government to probe the alleged liquor scam case has registered a case under IPC Sections 409 (criminal breach of trust by public servants), 420 (cheating) and 120 - B (criminal conspiracy) on September 23, 2024 at Mangalagiri.

In the recent remand report of Kasireddy Raja Sekhar Reddy, the prime accused in the Rs 3,200-crore alleged liquor scam during the previous YSRCP regime, the SIT has named several people who played a key role between 2019 and 2024.

It named Vasudeva Reddy, Satya Prasad, Rajampet MP PV Midhun Reddy, former YSRCP MP V Vijayasai Redddy, Sajjala Sridhar Reddy, retired IAS officer Dhanunjaya Reddy, Krishna Mohan Reddy and Balaji.

The Andhra Pradesh High Court had recently rejected anticipatory bail pleas of Dhanunjaya Reddy, Krishna Mohan Reddy and Balaji.

Kasireddy Rajasekhar Reddy, who had served as the IT adviser to former chief minister YS Jagan Mohan Reddy, was allegedly responsible for the discontinuation of popular liquor brands and the promotion of blue-eyed brands’ (favoured brands), along with other persons.

“Investigation so far done revealed that Kasireddy Raja Sekhar Reddy is the key person in criminal conspiracy and execution in organising the kickbacks driven liquor trade in AP (Andhra Pradesh) during 2019 – 2024,” said the remand report submitted to the court recently.

According to SIT, kickbacks worth around Rs 60 crore used to be allegedly extorted from liquor manufacturers monthly.

Kasireddy Raja Sekhar Reddy controlled the issuance of order for supply (OFS) of liquor to suppliers based on kickbacks received.

“He used to get sales data once in five days, calculated the kickbacks amount, and used to collect kickbacks through Booneti Chanakya, Dileep, Kiran etc.., once in five days,” said the report.

After collecting the kickbacks, the SIT alleged that Kasireddy Raja Sekhar Reddy used to send the proceeds to Midhun Reddy and others, among several other irregularities.

Further, it said the accused persons allegedly conspired to earn more profits by killing the brands of some companies and promoting their ‘blue-eyed brands’

Due to these alleged moves, the SIT said the market share of major liquor MNCs such as United Spirits, Kals Breweries, United Breweries and Pernod Ricard nosedived between October 2019 and December 2023.

“Their collective market share decreased from 53.2 per cent in 2018-19 to just 5.2 per cent by 2023-24,” said the remand report, adding that even though the stocks of popular brands were available they were neither supplied for retailing nor new orders for supply (OFS) were issued for them.

The remand report also claimed that Kasireddy Rajasekhar Reddy “confessed” that former CM YS Jagan Mohan Reddy had allowed him to formulate an excise policy which would generate revenues for the state and party (YSRCP).

However, Kasireddy Raja Sekhar Reddy refused to sign his “confessional statement”, the remand report highlighted.

Meanwhile, the YSRCP rejected the charges and slammed the N Chandrababu Naidu-led government for "orchestrating" a politically motivated liquor scam narrative against party leaders and employing media to propagate it.

(This story has not been edited by THE WEEK and is auto-generated from PTI)